Legal Question in Civil Litigation in Florida

If she bought the business, she bought the liabilities.

There should have been a good contract which specified excluded and assumed liabilities. Absent a contract excluding certain liabilities (such as premesis liability), I agree that she bought the liabilities.

That's a tough one. She needs to answer the complaint and check her contract from when she bought the franchise to see if she assumed its liabilities. I could not say more without reviewing it. Regards,

Did she buy the business entity or the assets? Most franchisors require a buyer to sign a new franchise agreement which replaces the old agreement as opposed to assigning the old agreement. The franchisee usually has its own business, either a corporation or limited liability company. If ownership of the stock or the limited liability company's shares were purchased by you, then the liabilities clearly came with the sale. If only assets were purchased without knowledge of the pending claims, then the liability may not have yet attached to the assets.

An additional consideration is fraudulent transfers. If the seller sold all its assets with knowledge of the probable claim, the transfer may be subject to a claim under the Florida Uniform Fraudulent Transfer Law. You would need more facts to come to any conclusion.

If you would like a cosultation, please contact me for one.

As mentioned, your wife need to answer the complaint to avoid a default judgment. It appears there is a statute of limitations issue (complaint was not filed in a timely manner) - accident in 2005, but did not file a complaint until 2009. Use a litigation attorney for advice.

Going to the "what did your wife buy" issue - it depends on the contract of sale terms. Did she buy the entire entity from the former owner or just assets and no liabilities. Show all relevant documents to a franchise attorney.

Kevin B. Murphy, B.S., M.B.A., J.D. - Mr. Franchise

Franchise Attorney